Bitcoin’s recent price fluctuations have caught the attention of both seasoned investors and newcomers to the cryptocurrency space. Following a surprising rebound to $81,180, driven largely by misleading news about a pause on US tariffs, Bitcoin has quickly lost its momentum. The White House has confirmed that 104% tariffs on China will indeed take effect, significantly impacting market sentiment.
In the wake of this announcement, Bitcoin dropped below the $75,000 mark for the first time since November 6, 2024. Traders are now looking closely at a critical demand zone between $77,000 and $73,400, which they hope will serve as a support level for Bitcoin’s recovery. This zone is notably important as it was established during the November 2024 market rally attributed to recent political developments.
Bitcoin’s daily chart showing recent fluctuations. Source: Cointelegraph/TradingView
Market analysts, including MN Capital founder Michael van de Poppe, believe that a retest of this critical zone is necessary before Bitcoin can resume its upward trajectory. Van de Poppe noted a significant indicator when Bitcoin approached the $80,000 mark, yet he remains uncertain about whether further declines are imminent.
“I don’t know whether we’ll be having another drop or whether we’ve seen it all,” van de Poppe commented.
Jelle, another market analyst, echoed similar concerns, expressing optimism about Bitcoin closing above $79,000 after witnessing a dip to $74,400. He is cautiously waiting for market conditions to stabilize.
The Potential Impact of Long-Term Holders
Data from CryptoQuant suggests that long-term holders (LTHs)—those who have held Bitcoin for more than 155 years—might be gearing up to sell following these recent crashes. Indicators such as the Exchange Inflow Coin Days Destroyed (CDD) metric show a notable increase, highlighting potential selling pressure.
This spike signals that older coins are being moved to exchanges, historically a bearish indicator. The recent trends resemble past patterns where significant CDD spikes preceded price drops. For instance, one spike led to a decline from $88,000 to $81,000, and another one predicted a 7% downturn just two days later.
Graph showing Bitcoin’s Exchange Inflow CDD. Source: CryptoQuant
As seasoned investors watch closely, it remains to be seen whether Bitcoin’s recent sell-off will continue. If history serves as a guide, traders should prepare for volatile days ahead, with Bitcoin’s former all-time high around $74,000 marking the first significant line of defense against further declines.
This article does not offer investment advice or recommendations. Every investment and trading move involves risk, and readers are encouraged to carry out their own research when making decisions.
